Alberta NDP calls for reinstatement of tax credits, provincial venture fund ahead of 2021 budget

Rachel Notley, Alberta

The Alberta New Democratic Party (NDP) is pushing for more provincial funding and programs to bolster Alberta’s tech and innovation sector.

On Monday, the opposition party published its tech sector strategy ahead of the United Conservative Party’s (UCP) 2021 budget, which is set to be tabled February 25. Among the opposition’s most notable policy proposals were the reinstatement of two tax credits cut by the UCP in 2019, the establishment of asnew provincial venture fund, and to attract a global accelerator to the province.

“Alberta needs a robust debate … about how we build our innovation ecosystem.”

The policy recommendations are part of the opposition’s engagement plan, dubbed “Alberta’s Future.” Alberta’s NDP began engaging stakeholders for the initiative in October after the UCP launched consultations for the 2021 budget, and is aimed to present paths to economic recovery that may differ from the UCP’s past or current policies.

According to the NDP’s report, employment in Alberta’s tech sector grew by 25 percent in 2020, making it one of the few sectors that continues to grow despite the COVID-19 pandemic.

“One thing that we’ve heard loud and clear is that the tech and AI sectors will play an even bigger role in our economy moving forward and we need to do much more to support it,” said NDP opposition leader Rachel Notley at a Monday event.

The NDP proposed to reinstate the Alberta Investor Tax Credit (AITC), which offered a 30 percent tax credit certificate to investors who provide equity capital to Alberta small businesses doing research, development or commercialization of new technology, products or processes. The NDP also proposed reinstating the Digital Media Tax Credit.

In 2019, the Alberta government, under UCP leadership, suspended the tax credits, a decision censured by many in the province’s tech sector.

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“The [AITC] was instrumental in establishing many small companies and set them up for long-term success, creating thousands of good jobs. By the end of 2018, the tax credit supported over 200 companies in Alberta,” Alberta’s NDP stated in its strategy.

The AITC was part of a number of program cuts initiated by the UPC that faced backlash and created concern amid the tech sector. The UCP later changed tactics; in late 2019, it created a working group to advise the government on its tech sector strategy and has made subsequent commitments to the sector in its 2020 budget and economic recovery plan.

In its strategy proposal, the Alberta NDP also called for the establishment of new funds to support innovation in the province. The first included an Alberta Venture Fund. Notley said the NDP would consider an “initial investment” from the provincial government of $200 million and would allow Albertans to invest themselves directly into Alberta tech companies.

“The fund would exclusively support startups and scale-ups to increase the number of startups, and help them all scale,” Notley said.

The opposition also proposed to establish a dedicated fund to support research and development in the province.

The NDP specifically pointed to the need to invest more in artificial intelligence applied research in Alberta. Organizations, including Calgary Economic Development (CED), tout the importance of AI in the region and have laid out their own recommendations for strengthening local AI and analytics startups.

CED’s recent report highlighted training talent, scaling to help achieve market penetration, financing to meet the needs of startups, and increased collaboration as key areas where the AI and analytics ecosystem can improve.

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The NDP is also calling on the UCP provincial government to focus on attracting a global accelerator. Notably, Alberta is home to several accelerators and incubator programs, including Platform Calgary, Startup Edmonton’s Propel accelerator, Creative Destruction Lab (which has nine locations globally), Hatch YYC, and the Telus Technology Accelerator.

“Local accelerators like Platform Calgary are doing incredibly good work, and we need to build on that work by offering support to them,” said Notley. “But we’re also proposing to track globally connected accelerated, for instance, Techstars or Y Combinator, through a competitive process that ensures the best fit for this province.”

While Techstars does not have an established accelerator in the province, the organization does run its annual Startup Weekend event, which is open to Alberta startups. That event is run in partnership with Startup Calgary, Startup Edmonton, and Platform Calgary.

In the June economic recovery plan, Alberta Premier Jason Kenney stated intentions to attract more global attention to Alberta, laying out plans to create Invest Alberta, a provincial agency intended to attract “job-creating investments” and market investment opportunities within the province.

Alberta’s NDP also recommended the province “grow and modernize” the Alberta Enterprise Corporation (AEC), which provides capital, support, and expertise to tech businesses. The recommendation followed one from the 2020 working group, which suggested the government invest an additional $450 million into the AEC.

Last year, AEC received a $175 million investment from the province as part of the government’s economic recovery plan, which some said was too small of an investment. On Monday, the NDP said it would consider ensuring the $450 million is invested over four years.

“Alberta needs a robust debate, and, frankly, a conversation about how we build our innovation ecosystem so that we can help form the backbone of our economic diversification and future job creation for decades to come,” said Notley.

Image source Wikimedia Commons.

Isabelle Kirkwood

Isabelle Kirkwood

Writer, globetrotter, drone pilot & David Attenborough enthusiast